March 18, 2019 Last updated March 13th, 2019 1,759 Reads share

6 Practical Steps That Will Save Your E-Commerce Startup From Failing

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A staggering 90 percent of startups fail, a much higher rate than the already high failure rates of most businesses. To succeed, you need to set yourself apart from the competition by making intelligent investments and taking important steps.

To be one of the minorities who survive, take the following six steps.

1. Build A Solid Team

During the crucial launch and scaling stages of your business, it is vital that you invest in your team. While big personalities and the brands that follow them can make it look like some startups are successful entirely because of a single name attached to them, the reality is that no startup will survive without a diverse skill set, top talent, and extraordinary teamwork.

Entrepreneur and investor John Rampton lay out the process as follows:

  1. Identify what positions the founders will have, and the other positions necessary to have a complete team
  2. Determine which tasks can be handled by advisors, contractors, and partners, and which will need to be full-time employees
  3. Determine who your candidates are
  4. Incorporate not only an interview but a real-world test into your hiring process
  5. Have your post-hire process prepared with training, promotion, and career development in mind

But a solid team isn’t just about having the right people. It’s also about organizational psychology and effective team building. For teams to work well, the American Psychological Association notes that:

  • Attitudes can spread through groups and affect your entire team, and team members high in conscientiousness make for more effective teams
  • Shared mental models and synchronized beliefs and perceptions allow team members to work together intuitively
  • “Huddles” and “debriefings” lead to more supportive team environments
  • Collaboration across disciplines increases productivity and innovation
  • Multicultural teams tend to generate more innovative ideas, but require more investment in trust building and hybridizing leadership styles to overcome initial friction

2. Invest In Your Online Reputation Management Early

Consumers are heavily influenced by your business’s online reputation. Ninety-one percent of 18-34-year-olds trust online reviews as much as friends and 86 percent of consumers read reviews for local businesses. Fifty-seven percent of your potential customers won’t even consider working with you if your star rating is below a four.

If you want to your startup to be successful, you need to make reputation management a priority from the beginning. Doing so will:

  • Help with employee loyalty and staff quality by boosting morale and attracting skilled labor
  • Increase visibility through the creation and amplification of brand advocates
  • Enhance your trust, credibility, and transparency
  • Allow you to gain insights from your customers about what they are looking for and how you can reach new markets

How do you invest in online reputation management?

Online reputation management expert Brian Patterson recommends that you “ask happy customers for reviews” since “consumers don’t typically review [businesses] unless something goes wrong.” He suggests that you:

  • Train your sales staff, or whoever builds the closest relationship with the customer, to ask for reviews and explain how to leave them
  • Tip your staff if they are mentioned in a review (only some review platforms allow this so be sure to review the terms and conditions)
  • Ask customers to leave a review via email, especially after pre-screening them with a survey
  • Make sure earning reviews is an organization-wide goal

Andy Beal’s tips for Twitter also apply more generally to reputation management as a whole:

  • Give whoever is running your social media accounts the tools and permission to engage with customers and your audience
  • Prioritize those who are mentioning you or reaching out to you specifically
  • Make sure that those in charge of your social media accounts are in a position of enough power that they don’t need to refer customers if things escalate

3. Hone Your Leadership Skills

You may or may not consider yourself a “natural leader,” but what ultimately separates successful leadership in a startup from failing leadership is the fact that leaders in the company continue to hone their skills.

Hiver founder Niraj Ranjan Rout believes these pitfalls are common for leaders of new startups and can be detrimental:

  • Placing excessive challenges on new hires to test them, without enough regard for how mistakes made will impact the startup’s future, and how much time the employee will need to become accustomed to the job
  • Setting individual targets instead of team goals
  • Failing to do any competitive analysis
  • Excusing failure, making team members feel like they don’t need to be accountable, and failing to identify the root cause of the failure so that it can be prevented
  • “Cheerleading” your star performers instead of encouraging group success, and failing to reward improvements in your other team members

Growth Advisor Sweta Patel names these four leadership skills as central to startup growth:

  1. Set primary goals that focus on providing value in the marketplace, rather than meeting metrics
  2. Cliche as it may sound, encourage out of the box thinking from your team. Don’t hover too much or make things so rigid that your team can’t be creative.
  3. Cultivate your listening skills, and ask questions. Listening improves cohesion and allows you to better understand what is happening with your startup.
  4. Help your team feel entrepreneurial; make them feel like a part of the business

4. Prune Your Networking Strategy

Having the ability to network is obviously an important skill for leadership in startups, but leadership often becomes so obsessed with “startup culture” and talking to other like-minded business innovators that networking for its own sake becomes a distraction from startup growth, rather than a way to invest in it.

Neil Patel, the successful founder of Crazy Egg, KISSmetrics, Quick Sprout, and HelloBar, takes a rather contrarian stance on networking, noting that most founders hate it and that most networking events are a waste of time that won’t teach you anything you couldn’t have learned at home. So he suggests getting more strategic and targeted with your networking:

  • Attend networking events almost entirely for the guest list. Don’t go if you aren’t explicitly interested in meeting anybody on the list.
  • Introduce yourself to people who are surveying the room or isolated on their phones, rather than trying to break into closed groups of people facing inward
  • Offer in-depth time, attention, and help, rather than trying to make as many contacts as possible
  • Only follow up with somebody if you actually have something valuable to offer, never “just to catch up”

Startup Grind CEO Derek Anderson echoes similar ideas:

  • Ask yourself how you can help others in the room
  • Make the goal building relationships, not getting “contacts”
  • Try to learn from every speaker, even the “boring” ones

5. Wait For A Product Idea People Are Willing To Pay For Immediately

Most startups fail in large part because the product on offer doesn’t address a pain that customers feel strongly enough about. The fact that most startups fail is, in part, self-fulfilling on the customer’s behalf. Why invest money in a product from an unproven company that will probably fail?

The most common reason startups fail is that 42 percent of the time, there simply was no market need for the product.

This is why investing in a minimum viable product before even launching is so important. You can test your MVP in various ways, such as:

  • Interviewing customers
  • Building landing pages and pre-order pages to test which features generate the most interest
  • Running ad campaigns to test ideas
  • Using fundraising sites like Kickstarter and Indiegogo
  • Delivering the product manually (if the end product is automated)
  • “Dummy” applications and paper prototypes

6. Watch Your Cash Closely And Get To Revenue As Quickly As Possible

Aftermarket need, running out of cash is the second most common reason startups fail, accounting for 29 percent of the failures.

Startups are often run by people who are engineers at heart, and for that reason, they often want a perfectly designed, fully functional product. They believe that if they invest all funds in achieving that goal, the money will follow. And it might.

But the market doesn’t see things the way most engineers do, and a product that is successful to its creator won’t necessarily meet the needs of its customers perfectly.

Investing as little cash as possible in generating a revenue source of any kind should be the primary goal of a startup founder.

A business that is not generating revenue will not survive.


A successful startup sets itself apart with a solid team, smart reputation management, strong leadership, focused networking, tested products, and cashflow consciousness. Take the steps necessary to prioritize what will keep your business alive and build the business of your dreams.

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Jaykishan Panchal

Jaykishan Panchal

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